Clerical 'in bid talk' with GE

JOHN EISENHAMMER

Financial Editor

Clerical Medical, the UK mutual life insurer, is believed to be in discussions with a potential bidder, possibly GE Capital of the United States. Analysts put a price of about pounds 1bn on Clerical Medical, the eleventh largest life company in Britain in terms of worldwide premiums.

Clerical is one of many mutuals busily reviewing their future in the light of much tougher business conditions in the life market, and the resources needed to keep up with technological change. Last month, Norwich Union, one of the country's biggest mutual insurers, decided to convert to a public limited company, adding urgency to the argument among insurers and building societies about the importance of size and diversification.

Speculation about the suitor also centered on NatWest Group. Clerical Medical took a 7.5 per cent stake in NatWest Life when it was set up, and runs its administrative as well as some of its fund management operations. NatWest has met with only modest success in building up its life business, and the market believes it is interested in acquiring the expertise, systems and client list a mutual would provide.

Eric Hodson, finance director at Clerical Medical, said yesterday: "We are not in serious discussions at the present time with a third party."

GE Capital, the powerful financial services arm of General Electric, the American conglomerate, has publicly stated its intention of building up business in the UK. It has been linked to bid speculation surrounding Mercury Asset Management, Baring Asset Management and Gartmore.

Last week GE Capital announced that it is buying for pounds 270m one of the US life insurance businesses put up for sale by Aon, a Chicago financial services group. Clerical would bring products, market experience and a fund on which GE Capital could build.

Clerical Medical traditionally sold life insurance through independent financial advisors, but recently built its own salaried sales force, with mixed results. A planned merger with NPI, another life company, collapsed three years ago.

Its free asset ratio, used by analysts as a rough guide to the strength of a life fund, is low compared to its larger rivals. The percentage of free assets to total assets at Clerical is estimated to be 4.7, compared with 13.7 at Standard Life, 12.3 at the Prudential and 7.6 at Norwich Union.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
News
newsAnother week, another dress controversy on the internet
Life and Style
Scientist have developed a test which predicts whether you'll live for another ten years
health
Life and Style
Marie had fake ID, in the name of Johanna Koch, after she evaded capture by the Nazis in wartime Berlin
historyOne woman's secret life as a Jew in wartime Berlin
News
news... and what your reaction to the creatures above says about you
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: A Customer Service Advisor is r...

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Day In a Page

Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot
Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

Poldark star Heida Reed

'I don't think a single bodice gets ripped'
The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn